Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
6 Sept 2024
Case Brief
By an order dated September 2, 2024, RBI imposed a monetary penalty of ₹5,00,000 on Aadhar Housing Finance Limited under Section 52A of the National Housing Bank Act, 1987. The action followed a statutory inspection by the National Housing Bank and a show-cause process. RBI found that the company had charged interest on loans for a period prior to the date of actual disbursement of the loan / issuance of cheque to certain borrowers, in violation of RBI directions under the Fair Practices Code and the Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021.
Why RBI Acted
RBI imposed a monetary penalty under Section 52A of the National Housing Bank Act, 1987 after a statutory inspection and subsequent show-cause process found non-compliance with the Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021. The sustained charge was that Aadhar Housing Finance Limited charged interest for a period before the actual disbursement of the loan / issuance of cheque, in contravention of RBI directions on the Fair Practices Code.
Operating Impact
Aadhar Housing Finance Limited must absorb the penalty and ensure its loan interest calculation and disbursement practices comply with RBI Fair Practices Code directions. The order does not, by itself, impose an ongoing operating restriction, but it signals continued supervisory scrutiny and the possibility of further action for similar non-compliance.
Regulatory Basis
- Section 52A of the National Housing Bank Act, 1987
- Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021
- Fair Practices Code
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 2 Sept 2024
- Effective From
- 2 Sept 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC